Samcheok power station
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Samcheok power station (삼척화력) is a power station under construction in Samcheok, Gangwon, South Korea. It is also known as Samcheok Dongyang Power, Samcheok Blue Power, Pospower power station, 삼척화력.
Location
Table 1: Project-level location details
| Plant name | Location | Coordinates (WGS 84) |
|---|---|---|
| Samcheok power station | Samcheok, Gangwon, South Korea | 37.40687, 129.1778 (exact) |
The map below shows the exact location of the power station.
Unit-level coordinates (WGS 84):
- Unit 1, Unit 2: 37.40687, 129.1778
Project Details
Table 2: Unit-level details
| Unit name | Status | Fuel(s) | Capacity (MW) | Technology | Start year | Retired year |
|---|---|---|---|---|---|---|
| Unit 1 | construction | coal - unknown | 1050 | supercritical | 2023 | 2054 (planned) |
| Unit 2 | construction | coal - unknown | 1050 | supercritical | 2024 | 2054 (planned) |
Table 3: Unit-level ownership and operator details
| Unit name | Owner |
|---|---|
| Unit 1 | Samcheok Blue Power [100.0%] |
| Unit 2 | Samcheok Blue Power [100.0%] |
Background
In September 2014, POSCO Energy said it had entered the coal-fired power generation business by launching Pospower. POSCO had previously focused on gas-fired thermal power. Pospower was formerly Tong Yang Power, which POSCO Energy acquired in June 2013 for US$421.8 million. Tong Yang Power had a business license to build and operate two 1,000 MW capacity coal-fired plants in Samcheok by 2021. Under the renewed development plan, Pospower would begin building the first 1,000 MW unit in 2016 after completing an evaluation of the environmental impact.[1]
In its 2015 annual report, POSCO stated the power station would consist of two 1,050 MW units, with the environmental impact assessment scheduled to be completed in 2015.[2]
Units 1 and 2 are scheduled to close by 2054.[3]
Opposition
The preliminary permit for the plant's construction expired in December 2016, and in January 2017 it was extended by the Korean government to June 2017, by which time the plant needed to get a final permit from the Ministry of Power. Before obtaining the license, POSCO had to gain local support, but many local citizens opposed the project over erosion concerns: the coal loading dock of the Samcheok Plant was set to be constructed in a coastal erosion management area, as designated by the Ministry of Maritime Affairs and Fisheries.[4] Samcheok City is requesting consent from the residents of the affected area.[5]
In February 2019, it was reported that locals were protesting the plant due its pollution impacts, delaying the start of construction. Additionally, natural caves were found near the construction site and, if determined to possess cultural assets, may affect construction plans for the plant.[6]
On September 10, 2019, Samcheok residents filed a lawsuit to halt construction of the plant for reasons of health and environmental damages, as well as protection of cultural assets and ground stability.[7]
In 2021, fans of K-pop (Korean popular music) making up the protest group Kpop4planet partnered with Korea Beyond Coal to launch the "Save Butter Beach" campaign, referring to a beach in Maengbang, ten kilometers away from the power plant site.[8]
In March 2022, a climate justice group protested the project's construction and called for progress to be halted. They highlighted the impact that the power station would have on both local residents and the global climate crisis.[9] Similar demonstrations calling for the project to be cancelled had been put on by the Republic's Justice Party and the organization Beyond Coal.[10][11]
In August 2022, environmental groups criticized the project's use of "eco-friendly" language, stating that it was misleading and false advertising.[12]
In November 2022, Catholic civil society groups and environmentalists held a protest against the construction of the power station. In September, civil society groups had submitted a petition with 50,000 signatures to the National Assembly in favor of halting the project and enacting a coal phase-out law.[13]
In February 2023, it was reported that locals were protesting "against the transport of bituminous coal using roads in densely populated residential areas," among other controversies related to the power plant under construction.[14]
In August and September 2023, several news articles reported a growing movement of K-pop (Korean pop music) fans protesting the coal plant's construction. The K-pop fans had reportedly begun organizing against "Big Coal" in 2021 to save a beloved beach from the heightened impacts of climate change and other environmental harm posed by the coal plant.[15] In September 2023, activists blocked the access road to the construction site as part of a demonstration to "support the global campaign to end the use of fossil fuel and to bring awareness to the fact that the fossil fuel industry is actually expanding."[16]
Government questions the role of coal
South Korea's new president, elected in May 2017, said he would consider suspending coal-fired power plants less than 10 percent into construction, which would include Pospower Samcheok.[17] In September 2017, the government released a statement saying it would push to transform coal-fired power plants less than 10% constructed into LNG-fired power turbines.[18]
Proposal permitted
Samcheok City reached an MoU with POSCO for the plant's dock in April 2017, with the Ministry's permit decision for the plant still planned for June.[19]
However, the country's 8th Basic Plan for Long-Term Electricity Supply and Demand (2017-2031), finalized in December 2017, did not list the plant for conversion to gas, suggesting it may remain coal-fired.[20][21] According to the Pospower website (April 2018), the plant will be coal-fired and is planned for operation in 2024.[22]
The coal plant was permitted for construction in April 2018.[23] After the approval, 785 civilians living in Samcheok City and Donghae City filed a lawsuit against the final approval of the power generation project due to coastal erosion and air pollution.[24]
In May 2018 the company began awarding construction contracts for the plant.[25] A construction contract was awarded to Doosan in June 2018.[26]
As of May 21, 2019, Planet satellite photos show land clearing but not construction.
Preliminary construction begins
As of November 4, 2019, Planet satellite photos show signs of preliminary construction.
In June 2020, it was reported the plant "consists of 91% of site construction, such as excavation, ground suspension, and waste-rock transportation, and 25.78% of subsidiary facility construction such as tunnel access road and port access road, etc." Commissioning was still listed for 2024.[27]
Based on Planet imagery from November 2019 to June 2022, ongoing construction was evident.
Construction stops & resumes
In 2020, former Democratic Party lawmaker Yang Yi Won-young and others raised issues about the proposal during a parliamentary audit at the National Assembly, including shoreline erosion at Maengbang Beach and greenhouse gas emissions. The Wonju Regional Environment Agency requested that the "erosion reduction facilities" be installed and start to function before construction could resume. Construction was suspended in October 2020 due to concerns about, and resumed in June 2021, eight months later, after a "verification committee" contributed to further delays.[28]
In August 2021, an official claimed: "There is no change in the construction period, and Unit 1 will be completed in October 2023 and Unit 2 in April 2024 as originally scheduled. It will help revitalize the local economy."[28]
As of November 2021, the plant was about 50% complete, with a goal of 100% by April 2024. The completion rate was expected to rise to 70% by the end of the year.[29]
In November 2022, Unit 1 was slated to begin test operations by the end of the month.[13]
As of December 2022, Unit 1 was expected to be connected to the grid in October 2023, and Unit 2 was expected to be connected to the grid in April 2024.[30]
Further construction delays (2023)
In February of 2023, it was reported that progress of the "Samcheok Blue Power Coal Power Plant was delayed in port construction due to coastal erosion" and as an alternative to the port, coal was being transported by truck through densely populated residential areas.[31]
As of May 2023, construction had reportedly been delayed for the previous 8 months "due to controversy over poor construction during a government audit." This resulted in the delay of a trial run planned for April 2023. At the time, local groups had been picket protesting the proposed coal plant for 736 days consecutively. [32]
A CarbonBrief report in July 2023 noted that the project was facing ongoing financing constraints amid its "fitful construction process," including the potential withdraw of proposed financial rescue bonds, whose would-be funders had recently declared phase outs of coal finance.[33]
In August 2023, it was reported that Unit 1 had begun test operations, but was not yet operating commercially. Unit 2 was estimated to begin commercial operation in April 2024.[34]
While previous reporting indicated that Unit 1 would be ready for commercial operation in October 2023, there was no news of the unit having completed testing or beginning commercial operation as of January 2024.
Legislative attempts to halt construction (2023)
An article in May 2023 reported that the continued construction or possible shut-down of the Samcheok coal-fired power plant would depend on "the enactment of the 'coal phase-out law'"; According to the report, the coal phase-out law "was referred to the National Assembly in September last year [2022] with 50,000 citizens joining the petition, but it is still pending."[35] As part of a local catholic anti-coal movement, one bishop said about stopping the coal plant's construction: “[...] I think it will be more difficult than the anti-nuclear power plant movement. There are few people who are actually active, but 60% of citizens are against it, so we will gather our hearts together to make sure it happens,” he added, adding, “It is an international disgrace that coal-fired power plants are still being built in this era.” [35] At the time of the report, it was unclear whether the legislation would successfully ban construction of the plant.
Financing
To address the unfavorable financial market environment and negative image of coal, POSCO Energy changed the company name of Pospower, which was in charge of the Samcheok Thermal Power Plant business, to Samcheok Blue Power in April 2020.[29]
A source from March 2021 stated that seven financial institutions including Korea Development Bank, the Industrial Bank of Korea and the National Agricultural Cooperative Federation committed to provide a combined 1.2 trillion won ($1 billion) financing for the 4.9 trillion-won project to build the plant.[36]
As of November 2021, the power station proposal was experiencing financing difficulties as many institutional investors were avoiding coal investments and pressure from civil society groups was growing. The sponsor planned to procure about 1 trillion won in corporate bonds out of the total project cost of 4.9 trillion Won, but 800 billion Won of corporate bonds had not been issued. To raise funds in June 2021, demand forecasting was conducted with the goal of issuing 100 billion Won public bonds, but they did not all sell. Korean credit rating agencies changed the credit rating outlook for Samcheok Blue Power from 'stable' to 'negative'. As the National Pension Service was preparing to introduce negative screening (investment restriction and exclusion strategy) as part of its coal-free strategy, POSCO was also expected to be a major target.[29]
In April 2022, six securities companies that were placing the bonds (NH Investment & Securities, KB Securities, Korea Investment & Securities, Mirae Asset Securities, Shinhan Financial Investment, and Kiwoom Securities) were criticized for supporting the financing of the coal project despite the fact that they all declared they would be coal-fee. An activist from the Green Alliance stated (Google translate): "financial institutions that talk about ESG management, responsible investment, and coal removal are absurd to continue investing in coal power plants".[37]
A credit rating report of Samcheok Blue Power dated May 2023 (page 5, translated from Korean) stated that the 4.9 trillion-won project is being funded with 20% equity and 80% debt. As of March 2023, 2.1 trillion won of funding has been committed via long-term loans (out of the total planned of 2.9 trillion won in long-term loans), and 845 billion won via corporate bonds.[38] The same was confirmed in the semi-annual report of the company (translated from Korean) listing 2.1 trillion won as of June 2023 in long-term borrowings and 845 billion in corporate bonds.[39]
Long-term loans were were extended over the period from 2019 to March 2023 in accordance with the Project Finance Agreement. Total contracted amount is up to 2.9 trillion won.[38][39] Loans include variable-rate loans from a group of 11 institutions (only Woori Bank is mentioned in the company's report) and fixed-rate loans from a group of 19 institutions (only KB Insurance is mentioned). In accordance with the Project Finance agreement, repayments are scheduled from June 2025 to the final maturity date in June 2044. In addition, Korea Development Bank is mentioned as secured creditor as well.[39]
As for the corporate bonds, 845 billion won of issued bonds outstanding as of June 2023 included 6 issues.[39] They are all 3-year issues with coupons ranging from 2.12% for the 2020 issue and 6.96% for the 2023 issue. Samcheok Blue Power had to offer significantly higher coupon in the recent issues to attract investors - most of the institutional investors stayed away from the issue, however retail investors were more attracted given high coupon levels.[40] Two bond issues have already matured and repaid in September 2022 and in March 2023, with the next maturity date in September 2023.[39][41]
However in more recent bond issues, only a small portion of the bonds has actually been sold to investors. The March 2023 issue was worth 205 billion won but reportedly only 24 billion was received in purchase orders.[42][43] The company has signed underwriting agreements with a number of securities firms and the unsold quantity is underwritten by NH Investment and Securities, Mirae Asset Securities, Shinhan Investmnet and Securtiies, KB Securities, Korea Investment and Securities, Kiwoom Securities.[40] If the securities firms do not sell on more bonds, the shortfall will be covered by a line of credit from an unknown financial institution (up to 360 billion won per year, with a maturity of 3 years), but it is understood that this line of credit commitment is valid through 2024 only.[38] The rating report noted that the financing burden of the company may continue and it is possible that the financial support from the shareholders may be sought.[38]
In mid-2023, the company planned to raise another 115 billion won in corporate bonds by 2024, and then to issue bonds every year after commercial operation of the plant.[38]
In September 2023, it was reported that the Samcheok Blue Power made another bond issue of 205 billion won at a coupon of 7.4% (the highest ever offered).[44][45] High interest from retail investors targeting high interest rates has increased the enthusiasm for additional subscriptions for Samcheok Blue Power. It appeared that most of the latest issue was confirmed via purchase orders.[45]
Articles and Resources
References
- ↑ "POSCO Energy launches Pospower," Korea Herald, September 22, 2014
- ↑ "Beyond Energy, Better Life," POSCO Annual Report, July 22, 2015
- ↑ "Assessing the Health Benefits of a Paris-Aligned Coal Phase Out for South Korea," Annex II (Unit-level phase out schedules), Climate Analytics, May 2021
- ↑ "포스파워 삼척화력 허가취소 모면…해법 '첩첩산중' - 에너지경제신문," EKN, January 18, 2017
- ↑ "삼척 화력발전소 유치 찬성 시민연대 발족," News 1, March 20, 2017
- ↑ "국내 마지막 석탄화력발전소 포스파워 '삼척 발전소' 제2의 난항 겪나," MSN, February 13, 2019
- ↑ "척포스파워 석탄화력발전소 건설 현장서 사업 백지화 요구," PGN Korea, October 21, 2019
- ↑ "K-pop fans fight big coal to protect beach made famous by BTS," The Japan Times, August 3, 2023
- ↑ "기후위기 기독교비상행동, 삼척 석탄화력발전소 건설 중단 촉구," No Cut News, March 30, 2022
- ↑ ""서울에 전기 공급 위해 지방 희생되는 정책 멈춰야"," Oh my News, December 17, 2021
- ↑ "포스코의 '삼척화력발전' 회사채 "주관하지도 사지도 말아야"," Newstree Korea, April 5, 2022
- ↑ "삼척 석탄발전소가 ‘친환경 발전소’라고요?," News Penguin, August 12, 2022
- ↑ 13.0 13.1 "S Korea’s new coal power plant irks activists, Catholics," UCA News, November 25, 2022
- ↑ “삼척 화력발전소 유연탄 육상운송 승인 취소하라” hanni.co.kr, Feb. 21, 2023
- ↑ K-pop Fans Are Fighting Big Coal to Protect Beach Made Famous by BTS, Bloomberg, Aug. 2, 2023
- ↑ “End coal”: Korean activists block traffic to coal plant, Hankyoreh, Sept. 13, 2023
- ↑ "S. Korea’s coal-fired power plant builders at risk of losing millions," Pulse, May 17, 2017
- ↑ "S Korea to tackle pollution by cutting coal, diesel use, switching to LNG," Platts, September 27, 2017
- ↑ "삼척화력발전소 건설 여부, 대선 결과 '촉각'," Pressian, May 8, 2017
- ↑ "S. Korea to shift toward renewable energy, natural gas," Yonhap News Agency, December 14, 2017
- ↑ "Ministry announces 8th Basic Plan for Electricity Supply and Demand," Korea Ministry of Trade, Industry, and Energy, December 14, 2017
- ↑ "삼척 석탄화력발전소 : 포스코에너지," Posco, accessed April 2018
- ↑ "신규 석탄화력 발전사업 먹구름 - 글조회 - 집단에너지정보넷," Korea DHP Network, May 2, 2018
- ↑ "삼척 화력발전소, 천연동굴 나왔는데 공사 'ing' - 시사저널," Sisa Press, April 30, 2019
- ↑ "삼안, 125억원에 삼척화력 부대시설 감리 수주 - 엔지니어링데일리," Engineering Daily, May 9, 2018
- ↑ "3조5천억 규모 삼척화력발전소 건설 계약," Kyongbuk, July 25, 2018
- ↑ "신규 민간 석탄발전소 건설은 속도 붙는데… 표준투자비 책정 논의는 '제자리'," cnews.co.kr, June 10, 2020
- ↑ 28.0 28.1 "삼척화력발전소 8개월만에 항만공사 재개," the Leader, August 3, 2021
- ↑ 29.0 29.1 29.2 "삼척화력발전소, 포스코 탄소 중립 달성에 ‘오점’ 남기나," hankyung, November 17, 2021
- ↑ "기어이 불붙은 ‘마지막 석탄발전소’…멀어지는 탄소중립," The Hankyoreh, December 1, 2022
- ↑ "삼척석탄화력발전소 시운전 위한 유연탄 육상 이송에 환경단체 반발," Kado, Feb. 3, 2023
- ↑ 현장 '2년째 매일 오후 4시'...오늘도 삼척석탄발전소 앞에선," News Penguin, May 19, 2023
- ↑ Guest post: Coal-project financing outside of China hits 12-year low, CarbonBrief, July 10, 2023
- ↑ “삼척이 가스실 된다”…MB가 재앙 씨뿌린 화력발전, 세상을 바꾸는 시민언론 민들레, Aug. 22, 2023
- ↑ 35.0 35.1 "삼척 석탄화력발전소 건설, "지하 사탄이 살아온 듯하다," CatholicNews.co.kr, May 18, 2023
- ↑ "Korea's final coal power project faces renewed scrutiny". /www.koreaherald.com. March 2021.
{{cite web}}: CS1 maint: url-status (link) - ↑ [https://www.hani.co.kr/arti/area/gangwon/1037632.html "‘탈석탄 금융’ 외친 증권사들, 화력발전소 건설 돕는다니 ,"] The Hankyoreh, April 5, 2022
- ↑ 38.0 38.1 38.2 38.3 38.4 "Samcheok Blue Power rating report" (PDF). kisrating.com. May 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ 39.0 39.1 39.2 39.3 39.4 "Samcheok Blue Power Business Report June 2023 (in Korean)". /dart.fss.or.kr/. 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ 40.0 40.1 "Samcheok Blue Power 7% corporate bonds rapidly emerge as valuable personal investments [Signal] (Translated)". www.sedaily.com. July 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Samcheok Blue Power Annual report 2022 (Korean)". dart.fss.or.kr/. 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Domestic bonds: Samcheok Blue Power, 6.961% 15mar2026". cbonds.com. 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Samcheok Blue Power tries again in the corporate bond market... Will the 'anti-ESG' trend succeed? (Translated)". news.einfomax.co.kr. February 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Domestic bonds: Samcheok Blue Power, 7.402% 15sep2026, KRW (KR6150351D99)". cbonds.com/. September 2023.
{{cite web}}: CS1 maint: url-status (link) - ↑ 45.0 45.1 ""7%대 고금리 채권 사자"…삼척블루파워 회사채 미매각, 개인이 살렸다". news.einfomax.co.kr. 19 September 2023.
{{cite web}}: CS1 maint: url-status (link)
Additional data
To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.
